Document Content

DECREE

Providing for the compulsory fire and explosion insurance regime

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the December 9, 2000 Law on Insurance Business;

Pursuant to the June 29, 2001 Law on Fire Prevention and Fighting;

At the proposal of the Minister of Public Security and the Minister of Finance,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of regulation

This Decree provides for the regime of compulsory fire and explosion insurance for assets of establishments prone to fire or explosion; responsibilities of insurance enterprises and establishments obliged to purchase compulsory fire and explosion insurance in implementing the compulsory fire and explosion insurance regime; and responsibilities of ministries, ministerial-level agencies, government-attached agencies and provincial/municipal People's Committees.

Article 2.- Subjects of application

This Decree applies to:

1. Agencies, organizations and individuals that have establishments prone to fire or explosion as defined in Appendix 1 to the Government's Decree No. 35/2003/ND-CP of April 4, 2003, detailing the implementation of a number of articles of the Law on Fire Prevention and Fighting.

2. Insurance enterprises which are licensed to conduct compulsory fire and explosion insurance business in accordance with law.

3. When a treaty to which Vietnam is a contracting party contains different provisions, the provisions of that treaty prevail.

Article 3.- Purchase of compulsory fire and explosion insurance

1. Agencies, organizations and individuals obliged to participate in compulsory fire and explosion insurance shall purchase insurance at insurance enterprises licensed to conduct compulsory fire and explosion insurance business and operating in Vietnam from the time a fire or explosion arises.

2. The State encourages agencies, organizations and individuals that are not obliged to participate in compulsory fire and explosion insurance under the provisions of this Decree to purchase fire and explosion insurance on the basis of voluntariness and compliance with relevant laws.

Article 4.- Enterprises conducting compulsory fire and explosion insurance business

Insurance enterprises licensed conduct fire and explosion insurance business under the provisions of this Decree are enterprises which have founding and insurance business permits granted by the Finance Ministry.

Chapter II

COMPULSORY FIRE AND EXPLOSION INSURANCE REGIME

Article 5.- Subjects obliged to purchase compulsory fire and explosion insurance

1. Agencies, organizations and individuals that have establishments prone to fire or explosion as defined in Appendix 1 to the Government's Decree No. 35/2003/ND-CP of April 4, 2003, detailing the implementation of a number of articles of the Law on Fire Prevention and Fighting, shall purchase compulsory fire and explosion insurance for assets of their establishments.

2. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Public Security and the Ministry of Construction in, defining and guiding specific objects subject to compulsory fire and explosion insurance such as dormitories and condominiums.

3. Based on the actual situation, the Ministry of Public Security shall assume the prime responsibility for, and coordinate with the Ministry of Finance in, submitting establishments to the Prime Minister for addition to or exclusion from the list of establishments prone to fire or explosion which are obliged to participate in compulsory fire and explosion insurance under the provisions of this Decree.

Article 6.- Assets subject to compulsory fire and explosion insurance

Assets subject to compulsory fire and explosion insurance include houses and architectural works and their attached equipment; machinery and equipment; other goods, supplies and assets the value of which can be calculated in monetary terms.

Article 7.- Minimum sum covered by compulsory fire and explosion insurance

A minimum sum covered by compulsory fire and explosion insurance means the monetary value based on the market price of an asset subject to compulsory fire and explosion insurance at the time of participation in insurance. If the market price of that asset cannot be determined, the sum covered by compulsory fire and explosion insurance shall be agreed by the parties.

Article 8.- Implementation of the compulsory fire and explosion insurance regime

The obligation to participate in the compulsory fire and explosion insurance regime under the provisions of this Decree is expressed by the entry by the insurance purchaser and the insurance enterprise into a compulsory fire and explosion insurance contract.

An insurance certificate is the proof of entry into a compulsory fire and explosion insurance contract.

Article 9.- Compulsory fire and explosion insurance contract

1. An insurance contract is the agreement between the insurance purchaser and the insurance enterprise whereby the former shall pay insurance premiums while the latter shall pay compensation to the insured in case of a fire or an explosion.

2. A compulsory fire and explosion insurance contract must comprise the following principal contents:

a/ Names and addresses of the insurance enterprise and the insurance purchaser;

b/ Objects of insurance;

c/ Insurance conditions, scope and terms;

d/ Insured value of assets;

e/ Applicable insurance rules and premiums;

f/ Terms on exclusion from insurance liability;

g/ Insurance duration;

h/ Insurance premiums and mode of payment of premiums;

i/ Damage assessment agency, when necessary;

j/ Time limit for and mode of payment of insurance sum or indemnity;

k/ Responsibilities of the insurance purchaser and seller;

l/ Regulations on dispute settlement;

m/ Liabilities of a contract breaching party;

n/ Date of entry into the contract.

3. Apart from the contents specified in Clause 2 of this Article, a compulsory fire and explosion insurance contract may also have other contents as agreed by the parties which, however, must not be contrary to relevant laws.

Article 10.- Exclusion of insurance liability

Insurance enterprises are not obliged to pay compensation for damage which is inflicted by one of the following causes:

1. Earthquake, volcano or other natural catastrophes.

2. Self-fermenting or-heat-radiating assets.

3. Assets are under the influence of a heat-using treatment process.

4. Lightning directly strikes the insured assets without causing any fire or explosion.

5. Fire or explosion is caused by nuclear weapon materials.

6. Damage to electric machinery or equipment or parts of electric equipment due to overload, over-pressure, short circuit, self-heating, electric arc or electric leakage caused by any reasons, including lightning.

7. Damage caused by intentional fire- or explosion-causing acts committed by the insured in order to claim damages under the insurance contract.

8. Damage caused by intentional violations of regulations on fire prevention and fighting, resulting in the occurrence of a fire or explosion.

9. Goods under entrustment or consignment, unless those goods are certified to be insured in the insurance certificate and the insured pay extra insurance premiums according to regulations.

10. Money, precious metals, gemstones, securities, letters of guarantee, documents, scripts, business books, computer files, diplomas, molds, drawings or blueprints, unless those items are certified in the insurance certificate.

11. Explosives, unless they are certified to be insured in the insurance certificate.

12. Assets which, at the time a damage is caused, are insured under the maritime insurance policy or fall within the insurance liability under the maritime insurance policy, excluding the part of damage which is beyond the compensation liability under the maritime insurance policy.

13. Damage caused by a fire or explosion to a third party.

14. Damage to computer data, software and programs.

15. Damage caused by unexpected political, security or social order and safety events.

16. Other cases of exclusion of insurance liability as provided for by law or agreed by the parties.

For the above cases of exclusion of insurance liability, if the insurance purchaser has an insurance need and the insurance enterprise accepts insurance, the parties may enter into an additional insurance contract for those events.

Article 11.- Assessment of damage caused by a fire or explosion

When damage is caused by a fire or explosion, the insurance enterprise and the insurance purchaser shall jointly determine the damage. If the two parties cannot reach agreement on the extent of damage, either or both of them may invite an agency or organization with the asset valuation function to assess the damage.

Article 12.- Rights of the insurance purchaser

1. To select insurance enterprises licensed to conduct compulsory fire and explosion insurance business in order to purchase compulsory fire and explosion insurance.

2. To request the insurance enterprise to explain and supply information related to the entry into, performance and termination of the compulsory fire and explosion insurance contract.

3. To request the insurance enterprise to pay indemnity quickly, fully and accurately under the terms of the insurance contract.

4. To reach agreement with the insurance enterprise on the insurance contract’s terms which, however, must not be against the law.

5. To account expenses for the purchase of compulsory fire and explosion insurance as goods or service costs, for production and business establishments, or include them in state budget allocations, for non-business units.

6. To initiate a civil lawsuit against the insurance enterprise which fails to pay indemnity in time or accurately under the terms of the insurance contract.

Article 13.- Obligations of the insurance purchaser

1. To participate in compulsory fire and explosion insurance in accordance with this Decree and other relevant laws.

2. To observe regulations on fire prevention and fighting as provided for in Article 9 of the Government's Decree No. 35/2003/ND-CP of April 4, 2003, detailing the implementation of a number of articles of the Law on Fire Prevention and Fighting.

3. To cooperate with the insurance enterprise in the process of performing the compulsory fire and explosion insurance contract.

4. To fulfill the obligations specified in the compulsory fire and explosion insurance contract.

5. To promptly inform the insurance enterprise of factors which have changed the extent of risk for the adjustment of insurance conditions and premiums.

Article 14.- Rights of the insurance enterprise

1. To collect insurance premiums as specified in the insurance contract and the list of compulsory fire and explosion insurance premiums in accordance with law.

2. To refuse to sell compulsory fire and explosion insurance if the insurance purchaser fails to fully meet the conditions on fire prevention and fighting as stipulated in Clause 2, Article 13 of this Decree.

3. To refuse to pay indemnity for cases of exclusion of insurance liability as provided for in Article 10 of this Decree.

Article 15.- Obligations of the insurance enterprise

1. To provide fire and explosion insurance in accordance with this Decree and the law on insurance business.

2. To sell compulsory fire and explosion insurance when the insurance purchaser fully meets the conditions on fire prevention and fighting as stipulated in Clause 2, Article 13 of this Decree.

3. To pay indemnity fully, quickly and accurately in accordance with the insurance contract and relevant legal documents.

4. To contribute to funding fire prevention and fighting activities in accordance with Article 16 of this Decree.

5. To fully explain to the insurance purchaser information relating to benefits and obligations of the insurance purchaser and the insurance enterprise; supply the insurance purchaser with the premium table and rules of compulsory fire and explosion insurance specified by the Finance Ministry.

6. To submit to inspection and supervision by competent state agencies in the implementation of the compulsory fire and explosion insurance regime.

7. To coordinate with the fire prevention and fighting police agency and the insurance purchaser in implementing the compulsory fire and explosion insurance regime and preventing and limiting losses for the insured.

8. To perform other obligations as provided for by law.

9. To send to the Finance Ministry periodical reports on the results of compulsory fire and explosion insurance business, made according to a form set by the Finance Ministry.

Article 16.- Collection of proceeds from compulsory fire and explosion insurance business for contribution to funding fire prevention and fighting activities

1. The enterprise conducting compulsory fire and explosion insurance business shall deduct 5% of the total collected compulsory fire and explosion insurance premium for contribution to funding fire prevention and fighting activities.

2. Biannually, the insurance enterprise shall transfer the amount collected according to Clause 1 of this Article to the Public Security Ministry's custody account opened at the central State Treasury for use as an annual additional fund for fire prevention and fighting activities.

The Finance Ministry shall provide specific guidance on spending contents and on the mechanism for management, allocation, payment and finalization of this fund.

Chapter III

RESPONSIBILITIES OF MINISTRIES, MINISTERIAL-LEVEL AGENCIES, GOVERNMENT-ATTACHED AGENCIES AND PROVINCIAL/MUNICIPAL PEOPLE'S COMMITTEES IN IMPLEMENTATION OF THE COMPULSORY FIRE AND EXPLOSION INSURANCE REGIME

Article 17.- Responsibilities of the Ministry of Finance

1. To assume the prime responsibility for, and coordinate with the Ministry of Public Security in, guiding enterprises to implement the compulsory fire and explosion insurance regime.

2. To inspect and supervise the collection, payment and use of revenues from compulsory fire and explosion insurance in accordance with law.

3. To promulgate rules and premium rates and tables of compulsory fire and explosion insurance in accordance with this Decree.

Article 18.- Responsibilities of the Ministry of Public Security

1. To guide the inspection of fire prevention and fighting safety and the inspection of satisfaction of fire prevention and fighting conditions for establishments obliged to purchase compulsory fire and explosion insurance.

2. To grant certificates of full satisfaction of fire prevention and fighting conditions to establishments defined in Appendix 2 to the Government's Decree No. 35/2003/ND-CP of April 4, 2003, detailing the implementation of a number of articles of the Law on Fire Prevention and Fighting.

3. To receive, manage, use, pay and finalize contributions to fire prevention and fighting activities which are collected from compulsory fire and explosion insurance in accordance with law.

Article 19.- Responsibilities of ministries, ministerial-level agencies and government-attached agencies

Ministries, ministerial-level agencies and government-attached agencies shall, within the scope of their tasks and powers, join in inspecting, guiding and implementing the compulsory fire and explosion insurance in accordance with this Decree.

Article 20.- Responsibilities of provincial/municipal People's Committees

Provincial/municipal People's Committees shall propagate and disseminate this Decree, and coordinate with the Ministry of Finance and the Ministry of Public Security in organizing the implementation of the compulsory fire and explosion insurance regime and the application of measures to prevent and limit losses caused by fire or explosion.

Chapter IV

COMMENDATION, AND HANDLING OF VIOLATIONS

Article 21.- Commendation

Agencies, organizations, individuals and insurance enterprises that have made active contributions to, and brought about positive socio-economic benefits in, the implementation of the compulsory fire and explosion insurance regime shall be commended and rewarded according to state regulations.

Article 22.- Handling of violations, complaints and denunciations

Agencies, organizations, individuals and insurance enterprises that violate this Decree shall, depending on the nature and severity of their violations, be disciplined, administratively handled or examined for penal liability; if causing damage, they shall pay compensation therefor in accordance with law.

Agencies, organizations and individuals may lodge with competent state agencies complaints or denunciations about acts infringing upon their rights and interests which are committed by enterprises conducting compulsory fire and explosion insurance business on their employees. The lodging and settlement of complaints and denunciations shall comply with the Law on Complaints and Denunciations.

Chapter V

IMPLEMENTATION PROVISIONS

Article 23.- Implementation effect

This Decree takes effect 15 days after its publication in "CONG BAO."

Article 24.- Organization of implementation

1. The Ministry of Finance and the Ministry of Public Security shall guide the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and presidents of provincial/municipal People's Committees shall implement this Decree.